Brown coal

I’m planning a full-length post on Garnaut, but I thought I’d do a quick check on what would be involved in meeting the target of a 10 per cent reduction in emissions between 2000 and 2020. My guess is that the increase in oil prices we’ve already seen will be enough to bring consumption of petrol and diesel back to the 2000 level, and that other sectors like agriculture will be roughly stable. That means that most of the reduction will have to be found in energy generation.

My rough estimate is that the use of brown coal in energy generation contributes around 10 per cent of total emissions (Update:After I revised my estimate to 15 per cent, reader Chris Short pointed me to a section of Greenhouse Gas Inventory I’d missed, which gives brown coal a 30 per cent share of electricity’s 34 per cent of emissions, so 10 per cent was right ), so, as a first approximation, the Garnaut target could be met shutting down the brown coal sector and replacing it with enough renewables to cover the brown coal share of existing electricity, and any growth in final consumption. Consumption growth would be constrained both by increasing prices and by conservation measures.

That would certainly require a substantial adjustment assistance program in the Latrobe valley and similar locations. We’ve done this kind of thing before, for example, with the end of the steel industry in Newcastle, sometimes well and sometimes poorly.

My guess is that the actual outcome would involve keeping some brown coal stations, with drying technology that reduces emissions to a level comparable with black coal, and some expansion of gas-fired power stations, offset by a combination of domestic offset measures and purchases of international offsets. The Garnaut cost estimates of around 1 per cent of GDP look pretty plausible for this. This story actually suggests a lower value, since $35 billion over 10 years is around 0.3 per cent of GDP.

John, I recall talking to a senior manager of a major NSW generator a few years ago – names aren’t necessary for this example. He assured me that they were capable of supplying all of Australia’s baseload electricity needs under full operation. These are black coal generators. The politics of COAG and national competition policy would seem to be other hurdles besides the good burghers of the LaTrobe Valley.

I think your suggestion is very logical, although may be politically difficult. There are many reasons to close down brown coal generation. The Latrobe plants are mostly quite old and will eventually have to go anyway. They are not very efficient or cost competitive if there was effective interstate copetition. The Latrobe area desperately needs a new industry, and the sooner that fact is faced the better off the region will be. If we can’t reform an industry at a time of close to full employment we might as well give up. It will never be easier to find people new jobs in another industry.

I’m going to have to disagree on several counts. Firstly I think Australia’s brown coal production has crept up to 60 or 70 Mtpa though the official stats are years old. I equate some poor quality black coals (Collie WA, Leigh Ck SA, Fingal Tas) with brown coal or lignite. Since we know some Latrobe valley stations produce up to 1.25 tonnes of CO2 per MWe I think we can guess up to 200 Mt of Australia’s 2006 565 Mt CO2e net (after land use etc) comes from brown coal. 10% is way too low.

To make matters worse I’ll throw in an unproven conjecture; the relocation of Nyrstar’s zinc smelting from Pt Pirie SA to Hobart is largely due to cheap Latrobe power via the Basslink undersea cable. Up to 50% of the Tasmanian grid supply at times is now from the mainland up from zero prior to 2006.

To keep it brief I also strongly disagree with using offsets as ‘negative emissions’ and using gas for baseload generation. I’ll argue that separately if challenged. We must penalise all CO2 the same and let the market sort it out. After all a supposed benefit of a national cap is to avoid picking winning technologies in advance.

Hermit, I’ll recheck the figures which were as I said, rough estimates. This site supports your estimate of 65 million tonnes of brown coal in Victoria, which with an intensity of 1.4 would account for about 80 million tonnes CO2 in total or about 15 per cent of all emissions. My estimates were based on electricity generation, including Leigh Ck as brown coal, but not including other uses of brown coal.

That means that most of the reduction will have to be found in energy generation.

Beaten to the punch by the Pr again! Just the other day I was talking to JN-T, my some-time boss, and suggested that banning dirty coal power stations was a better way to go than buggerising around with ETS’s and the like.

But I didnt put it on-line so priority claims do not count. (The Greens want to shut down the whole coal industry so I guess they get the real credit.)

Trading schemes are all very well but they can always be side-lines, white-anted or rorted. The option of moving carbon businesses off-shore defeats their purpose.

But straight out command and control methods such as banning, rationing or regimenting are more sure-fire. Banning CFC’s certainly worked to help the ozone layer.

We are not going to solve this problem by fashionable liberal means, relying on individual autonomies. Some forms of corporalism (institutional authority) is going to be be needed.

Not as I understand it, since caps can be doffed, so to speak, for a price. Although I am by no means knowledgeable about such details.

Cap and Trade still allows “individual autonomies” (nations, industries or firms) to exceed their capped limit. They just have to pay for the privilege. Wikipedia elaborates:

A central authority (usually a government or international body) sets a limit or cap on the amount of a pollutant that can be emitted. Companies or other groups are issued emission permits and are required to hold an equivalent number of allowances (or credits) which represent the right to emit a specific amount.

The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level. Companies that need to increase their emissions must buy credits from those who pollute less. The transfer of allowances is referred to as a trade.

The problem is that autonomous agencies which want to increase their emissions come what may can trade around and undermine the C&T system. They can their rationed carbon limit by swinging themselves some juicy credits on-shore or by going off-shore to a jurisdiction with generous entitlements.

It would be more effective from an ecological pov for a legitimate institutional authority to simply ban certain toxic activities outright rather than give people the option of taking the easy out. At some level the ecology is the economy and must take priority.

Rather like a diet where some people will indulge in trading carbs for fats and wind up going over their calorie limit anyway. Better just to ban eating large amounts of anything.

As in so many areas (drug addiction, gluttonous obesity, financial shenanigans) liberalism is the problem, not the solution. A stringent dose of “corporalism” is indicated.

‘A central authority, (usually a government or international body) sets a limit or cap on the amount of pollutant that can be emitted’
At his National Press Club address, Prof. Garnaut spoke of the advances that China was making on a number of alternatives, such that in his opinion it was ahead of Australia, though still up against increasing percapita emissions. Now as an ex-ambassador to Beijing he should know.
We also know that Mao once ordered a ‘cap’ on flies…and the nation responded. Rats got their marching orders too, such is a command economy.
If ever multi-lateral negotiations on a global ETS fail I hope we’re ready to join China in a bi- lateral ‘cap’. The biggest CO2/coal exporter and percapita emitter does a deal with the (emerging)largest emitter as an example to others. Over to you comrade Rudd.

Tony G, may I remind that the topic is the reduction of CO2 emissions and not “climate change”, as used in the link you referenced. [A comparable spin on a personal level would be to talk about long term variations in population growth rates (for n number of known reasons and some hypotheses) when the acute problem is to lose weight for health reasons by means of reducing calory intake. In this context, anybody who accepts such a spin is not a sceptic but someone who gets easily confused.]

Sorry EG, I forgot reducing CO2 emissions have nothing to do with â€œclimate changeâ€?. Like Environment Minister Wilson said “climate change occurred even when we did not have the increase on CO2 emissions experience in the last 200 years”.

“John, Your estimate of costs ignores the production and consumption costs of higher prices and hence is conceptually an underestimate. You baccount bonly for costs to energy suppliers.”

This doesn’t make sense to me, Harry. The estimates refer to the total costs initially incurred by suppliers. Most of these will be passed on to consumers, but regardless of the incidence there are no “consumption costs” additional to “production costs”.

Can a nation that’s opening 70 or so new coal mines and building infrastructure to seriously increase coal exports really have any credibility when it comes to climate change? What’s our per capita contribution to GHG emissions when exports are included? Anyone who thinks Australia’s share of this problem is small has blinkers on – we are right up there with the US and China and per capita we may well be the worst in the world. Given that, what Australia does regarding coal mining and export is crucial to future climate change – much more so even than the shutdown of brown coal electricity production, as necessary and desirable as that may be.

The conversion to a clean energy economy means the demise of the coal industry unless carbon sequestration becomes a ubiquitous reality and there isn’t much sign on that occurring any time soon if ever. Is anyone serious about policies that will bring about the collapse of the coal industry? Besides the Greens?

John, I don’t think the costs to electricity suppliers indicate the costs to the economy of a higher priced electricity. Some costs will not be passed on – some are sunk. There are also costs throughout the economy to firms and consumers from higher prices. I think Stern neglects these economy-wide effects as well.

I am reminded of the energy price hikes of the 1970s when economists said energy consumption is only a few percentage points of total spending. The price hikes then were nevertheless very costly in driving stagflation.

Some more throw away lines.
1) the domestic ETS is a joke if our 250 Mt of black coal exports produce 600 Mt of CO2. Cut exports instead.
2)if they were fair dinkum they could start July 1 next year. Round up the ‘Top 1000′ and make them pay $20 a tonne.
3) despite Business Council sobbing I doubt there’s anywhere else our aluminium smelters could move to, DR Congo or Iceland perhaps.

“I know the post is a thought experiment rather than a deep analysis, but isnâ€™t Garnaut assuming a fairly free international trade in permits – and thus a single world price for carbon?

If so, isnâ€™t the fate of our brown coal stations going to be decided by the global carbon price, rather than how much â€œAustraliaâ€™s emissionsâ€? need to be cut?”

This would the logical conclusion, Robert.

It escapes me why so many people seem unable to understand this.

However given our profligate carbon emissions, there probably are plenty of opportunities for reductions within Australia.

The qeustion is to what extent government and the markets should be making those decisions.

A buy-out and shut-down of the Latrobe Valley power plants with appopriate compensation and adjustment funds and replacement with bloack coal or gas is probably a useful Plan B in the event that the markets can’t achieve the proposed reductions at a reasoanble cost.

THe mere presence of such an option is likely to keep the market price for reduction credits lower.

Its not about the brown coal or any one single energy source. We need to get away from piecemeal ideas that shutting down the brown coal will reduce emissions.

The problem, in my opinion, is this. Humans cannot think long term. In the post that is also up at the moment on neoliberalism contains the idea that humans are selfish and short sighted. This is probably the essence of the problem.

If I stood in a supermarket isle and tried to sell $50 LED lights this is what would happen. I believe that 60% or more of people, even when explained that a 50 cent incandescent light globe over 5 years or so will cost 5 times as much as the $50 LED light, will still buy the incandescent globe. Most will cite that their budget today does not allow then to buy a $50 LED light and this is all they can afford.

The major problem is that we sell them cheap electricity to support their bad choices. Until this changes then people will still make bad energy choices because they can.

Even if we replace the brown coal we will probably still emit the same amount of CO2 as more people make bad choices.

The only reason we can sell cheap electricity is by ignoring the environmental cost. This is easy for us as most of us have very little connection with the environment.

My prediction is that we will continue to do very little about CO2 emissions with Gaunot 10% crap until such time that a major climate disaster occurs of sufficient magnitude that no-one in the US, China or India can continue to ignore. Then after a few million people die we might be able to actually do something about the root cause of the problem.

If this disaster does not occur then we were obviously wrong about climate change and nothing actually needed to be done.

If you need any conformation of this ask yourself why did it take 200 000 people dying to get a tsunami warning system installed in the Indian Ocean?

If a sufficiently large disaster occurs then we will be able to change attitudes to energy and make meaningful reductions in CO2 emissions as this is the only way that true emission reductions can be achieved. Until every single person looking for a light globe in a supermarket buys a $50 LED light and not an 50 cent globe and knows the reason why then shutting down brown coal is useless.

Ender – Nonsense. The problem is precisely the energy source. Replacement of fossil fuels with non-fossil energy sources is the solution.

And FWIW, your comments about LEDs are a red herring – compact fluorescents are more effective, much cheaper, and already offer cost advantages over incandescents. Which explains why their sales are exploding.

I am glad that you think that there is a simple solution. Non-fossil fuel energy sources, at least the ones that do not leave a poisonous legacy for the future, need some sort of co-operation from the consumers. By that I mean that only with energy efficiency gains and a change in attitudes to energy can renewables hope to meet the needs of a technological society. The only reason that we can be as wasteful as we are is because fossil fuels give us endless 24X7 power at very low monetary cost. Renewables do not do this quite as well however they have the enormous advantage of almost zero environmental cost.

Right now we favour the low monetary cost solution because we can. Until such time as we can’t I believe that virtually nothing can be done. Witness the Labor government and the whole Garnaut thing. The started with high dreams only to be brought to earth by the bean counters that basically makes putting environment before money political suicide.

BTW LED lights are more efficient that CFLs and lack the problem of mercury. The LED light thing was rhetorical anyway and I only used it as a demonstration of our attitudes. Do you think that a person buying a new flat screen TV takes notes of the power consumption? You have to be a nerd like me to look at the back of a plasma set and see that it consumes 500W and not buy it because of this. I have measured my TV and it consumes 200W, which is quite bad, however I am waiting for the new OLED TVs that should only consume 50W.

Ender – I was responding to the relentless and ill-founded pessimism inherent in your comment. You are intitled to your opinion that the Federal Govt’s emissions trading plans are already a failure, I suppose, but don’t expect me to take it seriously.

And I was well aware that your reference to LEDs was a rhetorical one (and that LEDs are more efficient than CFLs, for that matter), and I was pointing out that, as a rhetorical point, it’s a bad one, since there is good evidence that people are changing their behaviour and taking up more efficient products, CFLs being a salient example.

If Rudd’s MRET of 20% (however defined) by 2020 still stands that is not compatible with a mere 10% less emissions. I believe that target would take all of Australia’s current prime site wind generation (about .8GW nameplate) to be replicated for the next 12 years with existing coal or gas plant throttled back. Wind construction appears to be in the doldrums even as new coal stations are going up. We really should be cranking out green energy now at a very rapid build rate. Somehow we are supposed to believe there will be a great catch-up flurry of construction after the 2010 ETS-lite. The twin objectives may now be impossible.

Tim M – “Ender – I was responding to the relentless and ill-founded pessimism inherent in your comment. You are intitled to your opinion that the Federal Govtâ€™s emissions trading plans are already a failure, I suppose, but donâ€™t expect me to take it seriously.”

And I was responding to JQs ill founded optimisim that simply taking out one form of power generation is sufficient. This sort of thing smacks of “if we do this we do not have to do anything else” sort of thinking.

A renewable future will not be easy however I am not a doomer in that I think that it cannot be done – it can. However a renewable electricity grid will require changes in the way we use energy and we can still use some fossil fuels as long as they are less than 30% of the energy mix. I do agree that brown coal should go however that is not the be all and end all of the solution.

People who think that renewables are a drop in replacement for fossil fuels do not understand the way they work.

Until such time as you can convince a majority of people that paying $5000 for a new plasma TV because China is switching to renewables for a majority of it’s electricity generation is a good thing people will want to buy a $3000 plasma TV made cheaply in China with cheap fossil fuels. Yes attitudes are changing however the fundamental behaviour for a majority of people favours cheap energy. Generally for most people things like changing to CFLs is easy to do and do not involve any changes therefore those sort of things are getting done.

“Until such time as you can convince a majority of people that paying $5000 for a new plasma TV because China is switching to renewables for a majority of itâ€™s electricity generation is a good thing people will want to buy a $3000 plasma TV made cheaply in China with cheap fossil fuels.”

This assumes of course that the wishes of westerners as opposed, for example, to the wishes of Chinese not to die of lung cancer is the deciding factor.

Specific projects seem to need extra googling eg the fate of the huge wind farm proposed for ‘ Mad Max’ country. That seems to stalled due to fickle winds both political and meteorological.

I think gas is OK for combined cycle peaking plant but is wasteful for baseload. Higher priority uses are fertiliser, diesel substitute and process heat. We will have learned nothing from the UK’s North Sea woes if we squander it too quickly. Like a sleeper on the share market it should get a premium for long term term value.

Gas in combined cycle plants is much more efficient than coal. Thermal coal’s efficiency tops out at about 36% whereas a gas turbine combined cycle plant can be up to 55% efficient. A CCGT is not usually considered to be base load power plant mainly because of the cost of fuel – coal is cheap.

Where CCGT plants score is that they can interact automatically and efficiently with renewable power plants, something that base load power plants such as thermal coal cannot do.

For process heating a lot of processes can use the combined heat and power (CHP) units that are becoming popular at the moment. Rather than just burning the gas to heat water why not generate electricity first and then heat the water with the waste heat. CHP plants can also be integrated with automatic controls to interact with renewables.

This all makes an idea of just taking out brown coal all the more unrealistic. What we need for meaningful reductions in CO2 is an integrated approach that will give us a new smart grid that can be optimised for lowest possible emissions on a day to day basis. The smart grid will combine controllable fossil fuels, HVDC links bringing in renewable power, electricity storage and electric transport to produce the reliable power that our technological society needs.

We have the multiple problem of climate change, peak energy and a society that depends on energy and transport to keep functioning. We can solve any two of these easily however in most discussion or solutions I see misses out on including all three which is what we need to do.

An integrated smart grid with electric transport does tick all the boxes. I do not like the idea that just getting rid of brown coal is sufficient and there exists the danger of people thinking that if we do this the problem is solved and we can forget about it.

That is true however the danger is that this sort of band aid sort of measure could become the ‘solution’ if we are not careful. It could prevent further action on really worthwhile projects if to shut down brown coal we have to spend millions compensating everybody.

It really would be better to put the zero emission power sources into the grid and then force generators to start paying to emit greenhouse gases.

Hermit, the sources you point to suggest a more optimistic picture to me. Wikipedia’s wind power article gives 6GW of proposed wind generation in Australia. Granted that not all of those projects will proceed, it still seems reasonable to project at least that much capacity by 2020, given a carbon tax of $20/t or more. There also seems to be plenty of room for growth in geothermal – this will take some changes in the way we manage transmission in the grid, but governments are already looking hard at this question. Then, as noted above there’s solar hot water.

All of these seem to be feasible replacements for brown coal over a decade or so, and beyond that it seems reasonable to hope that photovoltaics will be cost-effective on a large scale.

And higher prices for energy will induce steadily increasing demand reductions through higher efficiency and changes in consumption patterns.

That’s not to say that our system will get its act together, merely that there doesn’t seem to be any fundamental technical obstacle.

Pr Q I think it will take more push than pull to scale up that quickly. The obvious mechanism is dangle the auction revenue from the ETS into a restricted list of approved rebatable purchases; solar hot water, smart meters, insulation and the like. I still think they could have a no frills ETS starting 2009 not 2010 if they wanted to get that ball rolling. Or slap say $50 a tonne on coal exports.

As for technology performance or cost breakthroughs (apart from volume) they may not eventuate ie the solar panels and batteries we have now may not improve all that much. With geothermal we are still waiting for Geodynamics to light up the town of Innamincka population 12 using the Kalina technology. We are waiting for silver bullets while we could make progress with picks and shovels.

I am a retiree with an interest in the energy debate. Your blog was mentioned on the radio so I had a look. Here is my reaction to the brown coal debate it you are interested.

The history of coal is that it has been burnt for centuries. In the latter part of the 19th century it powered steam ships and the railways, drove industry, heated homes and provided gas for heating and light. When the automobile industry started, petrol was made from coal. Coal made pharmaceuticals, fertilisers, dyes, tars and industrial chemicals. Coal has many, many applications but when it came to burning coal the process has been the cheapest and easiest. This lead Professor Striner to say………

“Coal, as it is and has been consumed, is a waste of a natural resource. Coal should not be burned in its raw form but should be so processed that it is utilised in the most efficient and economic manner possible”

These words were first penned in 1951 by Professor Herbert E. Striner and appear in his 1979 book An Analysis of the Bituminous Coal Industry in Terms of Total Energy Supply and a Synthetic Oil Program. Arno Press at page 184.

Coal was used efficiently in England in response to a tragedy.
London had more than 4000 deaths due to smog in 1950 and responded in 1956 with the Clean Air Act.

In compliance with the Act a smokeless fuel based on Thomas Parker’s Low Temperature Carbonisation Process developed in 1906 was produced. It was called Coalite and I believe is still available. There were different brands of smokeless fuel. I do not think pre-cleaning coal was practised elsewhere although British smokeless fuel was exported to many countries.

Other similar processes have been devised. The cleanest and most efficient method from available information is the Karrick Process from the United States. The various technologies are available but not used.

Burning coal directly to produce electricity is about 30% efficient. There are many ways to increase the efficiency, and it is quite possible to double, if not treble, the efficiency. This does not reduce the CO2 output per ton of coal, but halves the CO2 output per unit of power, and allows other toxic emissions and particulate matter to be captured.

Strangely there seems to be no interest in the efficient use of coal as an interim method of reducing CO2. There seems to be no realisation that we could half our fuel bill, increase the value of our exports, and provide China with not clean but smokeless coal which would make their cities smog-free. We could do all this and incredibly obtain oil as a by-product. Oil that can be refined into a cheap reliable supply of petrol, aviation fuel and diesel.

Coal, even brown coal, is the eighth wonder of the world. We have not yet learnt the value of its efficient use. Instead we invest in schemes that burn coal in pure oxygen and try to sequester CO2, both horrendously expensive and neither sustainable.

Coal is not the problem, we are. If we used simple proven methods of burning coal efficiently we could meet the 2050 targets in 2020.